Undercutting Internode: Exetel reveals NBN prices

National ISP Exetel has published its first commercial prices for services on the National Broadband Network, significantly undercutting previous prices published by rival Internode, with the cheapest option starting at $34.50 a month and the most expensive topping out at $99.50.

Internode created furore last week when it became the first national broadband provider to publish its initial pricing plans for commercial services over the NBN, with the ISP offering a series of bundled plans with an included telephone line at prices ranging from $59.95 per month through to $189.95 for a top-end plan featuring 100Mbps speeds and a terabyte of download quota.

Consumer groups such as the Australian Communications Consumer Action Network have raised questions about NBN affordability, while Shadow Communications Minister Malcolm Turnbull claimed the release of Internode’s prices undercut the rationale for the NBN entirely, as well as the credibility of the NBN’s chief proponent, Communications Minister Stephen Conroy. The prices were welcomed by NBN Co, however, which described them as adding some “very good” options into the marketplace.

However, Exetel, which is a much smaller provider but was still one of the first ISPs to conduct trials over the fledgling NBN infrastructure, last week published new NBN plans which appeared to significantly undercut those of Internode.

For example, Exetel’s lowest end plan costs $34.50 per month and delivers 12Mbps speeds with 20GB of data quota, making it $25.45 cheaper than an Internode plan with the same speeds but 10GB of quota more. Higher speeds are also easily accessible at lower prices — for example, Internode will charge $119.95 for a 100Mbps plan with 200GB of quota, where Exetel will only charge $89.50.

The plans appear, however, to be moderately more expensive than Exetel’s current broadband pricing. Currently, Exetel customers using ADSL broadband services would pay $39.50 a month for a service with 200GB of quota and speeds of up to 24Mbps, for example, and $25 more for line rental on a telephone line, for a total of $64.50. A similar NBN plan would cost $79.50.

However, the NBN fibre infrastructure will offer customers significantly better latency than the existing ADSL infrastructure. In addition, it is expected to be more reliable than services provided over Telstra’s existing copper network, and churning between providers should entail no customer downtime.

“The Labor government has made a major issue in their litany of idiotic statements about the benefits of an ‘NBN2’ along the lines of “more speed at the same price of ADSL2″,” wrote Linton on his blog on Friday. “At ‘NBN2’s’ wholesale pricing today that simply isn’t going to happen … at least not from Exetel.”

“Why? Because the monthly port cost of the lowest speed fibre service and the ‘backhaul/CVC’ cost is higher than even Telstra Wholesale charge for an ADSL2 service … and is almost double the cost of an Optus ADSL2 service … and that the fibre cost is going to get much higher once the ‘trial phases’ end and the [points of interconnect] move to their planned 121 locations instead of, as they now are, in CBD major data centres.”

However, despite the pricing uncertainty, Exetel will send out invitation emails to its customers in early stage NBN rollout zones in NSW and Victoria, offering them a free NBN fibre plan install with no charges for using it until September 30th this year. The Exetel trial will allow customers to keep their existing ADSL service and use both the ADSL and the new fibre network side by side, while continuing to pay only for the ADSL service.

“On or before 30th September they select which service they would like to keep,” wrote Linton. “If they don’t want to continue with the fibre service then they are not charged for it to be removed and they simply go back to using their ADSL service at their contracted price per month.”

Linton added in a separate blog post on Saturday morning that he would have liked to have offered quite a different model of pricing for NBN customers — using a monthly flat charge plus a 20c per gigabyte usage model, with no charge for uploads. “But the ‘me tooism’ entrenched by the ADSL marketing processes was judged to be ‘a common sense too far’ for the current hysterical fibre environment,” the executive wrote.

144 COMMENTS

*Because the monthly port cost of the lowest speed fibre service and the ‘backhaul/CVC’ cost is higher than even Telstra Wholesale charge for an ADSL2 service … and is almost double the cost of an Optus ADSL2 service … and that the fibre cost is going to get much higher once the ‘trial phases’ end and the [points of interconnect] move to their planned 121 locations instead of, as they now are, in CBD major data centres.*

thanks for reporting those comments.

i wish there was a way (simliar to LSS/ULL) to bypass John Linton’s $20 toll on access to his blog.

“its 5 dollars or 10 dollars a month which is still better than normal line rental”

Well it’s just bog standard VoIP that has been around for years, it works exactly the same way as VoIP on copper and you can choose any VoIP supplier you want , you can have Internode VoIP on Exetel NBN if you want.

BTW VoIP voice does not equal PSTN voice, that’s why a ISP like Internode for has two products, Nodeline (PSTN) and Nodephone (VoIP).

Internode know many of their customers prefer PSTN that’s why they sell it.

So what’s so hard about voice over NBN Co FTTH as distinct from voice over FTTH in a Greenfields estate such as installed under the Telstra Velocity scheme that has been around in Australia for years ?

I am sure Telstra didn’t roll FTTH into those estates and say “BTW sorry, we will give you voice in 12 months – we are still working on it”.

So if you add the VoIP costs they seems to be quite similar pricing, the big difference (and something that bugs me about the internode plans) is that Exetel are happy to have a more tiers in their pricing plan..

I want at least 50mbit speed and more than 30 gig downloads but way less than 200gig downloads.
Exetel fit this well, but Internode seem to want to simplify things to the nth degree and in the process it makes their pricing structure a lot harsher looking.

Come on Internode give us some ant anti aliasing in your pricing structure… This 8 bit approach is just Ugly.

You need to make a distinction on what you mean by line rental and what PSTN line rental gives you which is not just a line but PLUS a voice service with all the legislated Customer Service Guarantees that Telstra has to provide when a customer takes such a service.

There are also other advantages of PSTN like emergency calls recognition of address, back to base alarms and a working service if your power goes out at your residence.

No such legislative customer guarantees exist for VoIP, and that’s another reason the best VoIP routers have a socket for PSTN fallback.

“There are also other advantages of PSTN like emergency calls recognition of address, back to base alarms and a working service if your power goes out at your residence.”

My alarm is BTB and works over VOIP. Battery backup is wonderful no? And as for recognition of address, that is possible with VOIP as well. Whenver I ring the Taxi’s here they ask am I sure that I want a taxi from them as my VOIP number is a Sydney number rather than Central Coast. They can even tell me the address that the number comes from and have before.

Also Alain, have you taken into consideration the cost savings of VOIP over PSTN? I agree with you we should be able to have unbundled plans, just get that out of the way. But VOIP is heaps cheaper for calls, and considering that you are paying line rental + calls + ADSL, would not any discrepancy in most cases balance out, and in many be cheaper? (Assuming line rental vs port thingy charge)

Well that’s interesting you say taxi’s know what your address is because the IPND, the Integrated Public Number Database only allows the full details, that is full name and full street address to emergency services only.

The VoIP number gives them the exchange area, but are you sure it’s not because as a regular customer for that Taxi Co that when you ring they look up their own internal database and know who are and what your address is because you told them the very first time you rang?

Hence the problem with VoIP numbers and emergency services that number can be used no matter where you are, they are not necessarily permanently linked to a particular address.

I take on board what you say about the back to base alarm systems, it’s just that anything I have read is that PSTN line is recommended for them, even though they may work over VoIP, perhaps others with more knowledge on how they work can offer reasons why this would be so or not.

Perhaps thinking about it logically it’s linked to the Customer Guarantee on the integrity of the line and fault reporting, Telstra know it’s a back-to-base alarm line and it has priority if a fault occurs, I would have thought such a line would need to have automatic fault flagging.

Taxi companies do not access to the IPND. They build their own database as people call in over time. I have worked with a number of these systems – (Raywood, Expertech, MTData) – and I have never seen any of them accessing the IPND.

The IPND is just a database, Alain. There is no reason why you could not allocate a VOIP phone number to an address. BT in the UK went completely VOIP a couple of years ago, and they seem to be managing just fine.

The thing you cant do with voip over FTTH that you can with a copper PSTN is, as you mentioned, still use it when there is a power outage (assuming the power outage is localised…) But then, how many people are using a handset these days that doesn’t need additional power? How many people don’t have a mobile phone? I get that this is an important feature of a PSTN, but its significance is decreasing, and there are ways to mitigate the issue of power loss (which, arguably, you should have in place anyway if you feel it is that critical a feature).

There have been two comments accompanying each respective NBN ISP’s plan release, the Hackett blog repeated here in Delimiter and these comment from the Exetel chief.

” Because the monthly port cost of the lowest speed fibre service and the ‘backhaul/CVC’ cost is higher than even Telstra Wholesale charge for an ADSL2 service … and is almost double the cost of an Optus ADSL2 service … and that the fibre cost is going to get much higher once the ‘trial phases’ end and the [points of interconnect] move to their planned 121 locations instead of, as they now are, in CBD major data centres.”

Just simply comparing the Exetel plan table with the Internode table and saying phew all is ok in the NBN resell world again is is total BS.

Internode’s upwards revision of ADSL pricing followed by statements that they will have to push prices even higher on NBN retail in the future confirms what the industry already knows, i.e NBN is EXPENSIVE to use.

*But we are getting a better picture of it now and can see that the pricing isn’t all going to be like Internodes.*

of course, not. just like you can get pick up a $50 hooker on Las Vegas strip street corner, or you can get higher class $5000/hr at the casino high-rollers cocktail lounge…. up to $1mln/night supermodels for billionaires like Tiger.

Exetel customers using ADSL broadband services would pay $39.50 a month for a service with 200GB of quota and speeds of up to 24Mbps, for example, and $25 more for line rental on a telephone line, for a total of $64.50. A similar NBN plan would cost $79.50.

That right there is the key statistic, I’m sure this would be a very common plan and the pricing is very much smack on mainstream Australian Internet pricing. That’s more than a 20% price hike for going to NBN, at a time where official inflation figures are about 3% or something.

To be fair though, plenty of other people said this would happen before I did.

Now we sit and watch the ALP figure out how to get 10 million people to pay extra and achieve uptake statistics that no one else in the entire telco industry has ever been able to achieve… and you thought the circus was entertaining!

Except you are forgetting a rather important distinction between your so called ‘similar services” on ADSL and NBN. how you can compare ADSLs “up to 20mbps” which for the vast majority of the population translates to sub 15mbps syncs (and for a significant number even below 10Mbps!) and the 30-40msec at best ADSL pings to NBN’s visually guaranteed sync of 25Mbps and sub 20msec!

That my friend is a BIG distinction between the 2 services in real life, something not evident on paper.

There is absolutely no end user difference between 20 millisecond ping times and 3 millisecond ping times.

Everytime I hear this I chuckle. That’s not how real-time communication works. Just because the latency is imperceptible to humans does not mean it doesn’t need to be reduced. If that were the case we would have stopped at about 80 ms because beyond that point no body will notice.

In trade and stock exchange that extra 17ms can be the difference between making a trade or not.

In gaming that extra 17ms can be the difference between if a bullet intercepts the target or not.

All things the human won’t notice, oh I didn’t get that trade, oh I missed, I must have miscalculated his velocity and over or under compensated.

But to say the experience to the end user is imperceptible? To say that 17 ms isn’t worth shaving? Anyone who says that doesn’t know how real time communication works.

There are companies across the world right now paying billions of dollars in order to shave microseconds off a communication link.

There are companies across the world who spend millions of dollars forming data centres 300m closer to communications hub in their city in order to shave one or two micro seconds off the time it takes to talk to a market else where in the world.

17 ms is an age. And I will gladly pay the, quite frankly, tiny premium in order to experience it.

In gaming that extra 17ms can be the difference between if a bullet intercepts the target or not.

The scheduler in your operating system (under high graphics load) is probably only stable to about 10ms. The USB on your mouse and keyboard cannot deliver better than 1ms latency (because USB frames are locked at 1ms) but for practical purposes those devices are probably around 10ms as well (I know, you paid $300 for a low-latency gaming keyboard, so yours is no doubt faster than mine, well done sir).

You’re right, in the bracket where you don’t notice the latency, 17 ms isn’t going to make the slight bit of difference to humans, except on a once and a million shot. However that isn’t where 17 ms makes the difference. It’s when you’re just on the cusp of playability that it’ll make the difference. For example, playing on a server in the United Stated or even just across the continent or the ditch. By reducing latency by 17 ms you increase the horizons of players by 17 ms. It isn’t negligible in these cases.

Also consider this, if the server you’re playing on happens to be hosted by another friend who has been upgraded to the NBN as well, the latency reduction experienced is now closer to 34 ms. If your friend happens to live in Perth and you in Hobart, that 34 ms might mean you’ll finally able to play each other without worrying about latency. It isn’t negligible in this case either is it?

Next time you play one of your online games, and you’re playing a mate in New Zealand or across the continent, and you’re experiencing lag, think to yourselves, will that 17 ms the NBN will offer make the difference here?

Gamers won’t wanted the improved latency of the NBN because it means they can pwn people with a better reaction time, they’ll want it so they can play on servers that used to be just too far away for their ADSL connections to handle (be it because of inefficient topology or other issues associated, I know how you love pointing out how it’s not the copper that’s causing the latency deteego).

Not that that is a justification for the NBN in itself, never said it was, but I assure you there are people who will pay the premium for this extra 17 ms of horizon.

Why do you even pretend to care about the “premium” people will or won’t pay? It’s not like the well-being of Australians’ financial situation bothers you one bit. All you really care about are your Telstra dividends. Why do you have to be so sociopathic?

“Where “significantly” means “can be measured but has no effect on anything”. There is absolutely no end user difference between 20 millisecond ping times and 3 millisecond ping times.”

You are teh funneh. 20 ms ping times? Riiiight. Maybe if your copper is new and you live within 100 m of the exchange and are only getting info from someone else within the same parameters will you reasonably get that. Funny tho. Most people are not that close, nor have copper in anything but degraded states.

It’s common knowledge that the farther you live away from the exchange, the condition of the copper, and line noise are all factors in determining speed and ping times. General rule of thumb is the further away you are, the slower your connection speed and reliability.

That’s why fibre is not comparable to ADSL2. I pay for a 25/1 ADSL2 plan and do live relatively close. However my sync rate is 16mbps and I never see downloads get above 12mbps down in real world terms. The best ping I can get to Melbourne gaming servers is roughly 40ms. I consider myself to be one of the lucky ones compared to others I know stuck on 6mbps on a Telstra DSLAM.

So in reality, even though I intend to pay more for at least 25/5, a basic 12/1 NBN plan would deliver me equal or better speeds (with lower latency) than I get now on so called “25mbps ADSL2” now. Of course I also get 150GB to play with at the moment, so I’d expect at least that when I switch to fibre. 400GB a month would suit me just fine on a 25/5 connection.

The copper in my area is about 60 years old as best as I can tell from when most of the houses were built. Of course I can’t say with any certainty what any particular strand is doing. Telstra does not provide records of how often it has been refurbished in that time.

At any rate, attenuation in the copper is irrelevant to small-packet latency over ADSL, regardless of whether that attenuation is caused by the length of the wire or some sort of damage / degradation. You may get packet loss if the ADSL cannot find a noise margin that it is comfortable at, but I’m talking about latency, not packet loss.

As predicted rather than you accepting the answers (even evidence from the exalted Liberal party) to questions YOU asked, here come the excuses AGAIN (unlike the Senate comment which you just ignore now…LOL), just as prophesied…!

Gee and I thought you’d argue over one word but that word would be degradation, instead you try to weasel via the word MOST…sigh!

Well deteego, common sense (sorry, not meaning that as a personal attack, since you may not have any) says more people are on slower speeds because they don’t live near an exchange than those who do… surely even a FUDster political sheep, not suggesting you are ;-) could work that out…!

As for the 2nd part, “degraded”… well from your 2nd hero (Malcolm’s) mouth “In terms of the bulk of the brownfields, existing built-up areas in the cities, there are some areas where you would run fibre right out to the home, or certainly very close to the home. And they might be areas where…

*the copper network is very old or where it’s very wet*.”

But if you wish to argue over the fact that the actual word degradation wasn’t used, as opposed to “very old and very wet”, please do so, if it saves dat ego…

Just as your clone alain did, when he asked for examples of Coalition support for people to MOVE if they can’t currently get decent comms. So I gave him one (ironically YOU – as you said this and admitted to supporting the Coalition).

Of course lainy then wanted to argue over the letter s, as in supporterS multiple… OMFG…

Gee here we (well you guys) are arguing over the difference between degradation and “very old and very wet…sigh” and distance from the exchange (which is bleedin’ obvious and universally known and accepted)…!

But out of the woodwork comes wiki links to “latency and throughput”… two words not mentioned in any of the questioning…wow. But you will argue overe degradation?

This must be those magically moving goal posts we keep hearing about from your clone?

deteego
Posted 25/07/2011 at 3:22 pm | Permalink | Reply
“Most people are not that close, nor have copper in anything but degraded states.
Can I have some evidence backing up this claim”?

Feel free to R E A D it… sigh! I even used your hero Malcolm, whom you “always” go into bat for…

Dear oh dear, trying to correspond rationally with the irrational is such a chore, perhaps I’d have more luck with the dog…? At least if you show him something actual he won’t say, no it’s not (yes he can talk…sigh) and argue for the sake of arguing, to try to prop up his own bruised ego and to demonstrate his political subserviency…!

That’s iiNet “Naked”, not a particularly special plan (a tiny bit extra for Annex-M), single copper pair, Netcomm NB6 in bridge mode (years old, burned out it’s first set of power caps as they always do) and with a linux router in the middle running packet shaping to slow it down a fraction. Down attenuation is 32.5 dB and adsl2exchanges.com.au estimates that my cable run is about 2k into Granville telephone exchange (Western Sydney) and it tells me I should get a speed of 14k which is pretty close to accurate.

If you knew anything about ADSL networks, you would know that making the copper longer does not reduce small-packet ping latency, it does reduce throughput.

The main thing I like about Exetel’s NBN plans are the unmetred uploads, 40Mbit/s upstream unmetred is crazy, the best thing about the NBN is you can run multiple RSP’s at the one house.

Just imagine having 3 connections, the 20G 100/40 Exetel plan for $50 for uploading, some TPG plan with ridiculous amounts of quota for downloading, then a tiny quota Internode plan for gaming.

Switch between them on the fly depending on what it is your doing, to get the best bang for your buck and performance. You don’t need your ‘useless’ intensive data traveling the best network, but it would be nice to have a connection with ‘the best network’ for when it comes in handy.

Well deteego, common sense (sorry, not meaning that as a personal attack, since you may not have any) says more people are on slower speeds because they don’t live near an exchange than those who do… surely even a FUDster political sheep, not suggesting you are ;-) could work that out…!

As for the 2nd part, “degraded”… well from your 2nd hero (Malcolm’s) mouth “In terms of the bulk of the brownfields, existing built-up areas in the cities, there are some areas where you would run fibre right out to the home, or certainly very close to the home. And they might be areas where…

*the copper network is very old or where it’s very wet*.”

But if you wish to argue over the fact that the actual word degradation wasn’t used, as opposed to “very old and very wet”, please do so, if it saves dat ego…

Just as your clone alain did, when he asked for examples of Coalition support for people to MOVE if they can’t currently get decent comms. So I gave him one (ironically YOU – as you said this and admitted to supporting the Coalition).

Of course lainy then wanted to argue over the letter s, as in supporterS multiple… OMFG…

Just thought I would add one point that has not been mentioned so far (just finished reading all comments) that while not guaranteed in a set time frame, will definitely happen before the network has been built:

Fibre speed increases from upgrades in technology on each end of the fibre cables, which could turn that 12mbits to 120mbits, so 34.95 for 120mbits/10mbits say in 4-5 years looks much more appealing and for many here whose households will not be on NBN until then or later, realistic.

It is mainly the discrepancy between each person’s broadband connections that makes the current broadband connection options much worse than an alternative NBN option.

For example I live in a regional town about 250km road distance north of Adelaide and 1500m line of site from exchange, I get an ADSL1 RIM connection @ 4.8/0.384Mbits, our town has many RIM’s and a ADSL2+ exchange provided by Internode and one from Telstra and unless you live in specific parts of town you cannot access it, also my ping to the Adelaide Internode IP address is 42-44ms.

In comparison someone I know in another town 100km further from Adelaide has ADSL2+ from Internode, lives 1700m line of site from exchange and not on a RIM (only a few RIM’s in that town), has his line profile set to low latency and syncs at around 9.0/1.0Mbits and the ping from them to the Adelaide Internode IP address is 18ms.

But I do think they should look into the POI as that will make smaller providers have to take lower profit margins or increase prices compared to the larger players, which will always keep them at a disadvantage with the exception of innovation that often (not always) happens more in smaller businesses.

What I don’t understand is how will a customer be billed for thelephone calls, by the high data rate I guess it will just be included as data. and that sucks. then landline phone calls are not just timed but volumised.

Thanks, I was unsure on that.
If a customer just wanted internet do they then pay line rental as before, bundles being very much the same as before. or can a customer select from a variety of products without having to take tem all.

– Internode will charge $119.95 for a 100Mbps plan with 200GB of quota, where Exetel will only charge $89.50.

Exetel are offering this service at $99.50, not $89.50.

Then, you should factor in the full costs:

Minimum 12 month cost for Exetel on the plan you specifically compare is $1294.
Add in $10 of call credit/usage for each month and it becomes $1414.
Minimum 12 month cost on the Internode plan is $1439.40 with the included call credit.

Yes, you can’t take away that $10 credit from the internode service, but it is there. Comparing them like for like gives a total twelve month difference of $25.40, or $145.40 at the top end.

Sure, this changes across the various plans offered but I still cannot see how they are significantly undercutting in your comparisons. Neither provider is offering services at the level the NBN should have provided in the first place. I’m optimistic that it will get better, so we’ll see how it all pans out in the years ahead.

“I’m optimistic that it will get better, so we’ll see how it all pans out in the years ahead.”

That’s not what the respective CEO’s of Internode and Exetel have said in comments published with their plan releases, in fact they said it will get worse, but never mind blind optimism has always underpinned the NBN.

I see the benefits to my organisation that the NBN will help alleviate (based on negotiations already underway), and I see the benefits to rural areas of the RBBP/NBN.

I am neither here nor there about the NBN as a consumer, and have zero control over the pricing structure or architecture. The decision around the 121 POI’s appears to be a poor one, but I cannot change that. If I cannot, as an end-user, be optimistic that pricing will improve for retail services (they will be significantly better than all of our current IPMAN/GWIP links at work)… then I am left doing what, exactly?

Alain “No one knows, the NBN Co has not provided their own voice product yet, for what ever reason no one can answer they are still working on it after 12 months of the NBN rollout starting in Tasmania.

I suspect it’s political more than technical.”

The waiting is the worst, Technology offers the best if it is utilised properly, and the worst if has not been utilised or implemented properly.

Perhaps you could look at Tasmania where they conducted the trial as a guide. but volume patronage will effect the products on offer. So its wait and see, if your replys are any guide.

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